Companies, struggling to cut costs, dumped a near-record 25 million square feet of office space in the first quarter, driving vacancy up and rents down, according to data to be released today by Reis Inc., a New York firm that tracks commercial property.
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The office vacancy rate nationwide rose to 15.2% from 14.5% in the previous quarter, and likely will surpass 19.3% over the next year, Reis said. That would put the vacancy rate above the level during the real-estate bust of the early 1990s, the worst on record.
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The weakening commercial real-estate market is posing yet another threat to the ailing economy because it is causing the value of buildings to plummet, often to less than the amount of their mortgages…Earlier this week John Hancock Tower in Boston was valued at $660.6 million in a foreclosure auction, less than half of its $1.3 billion price in 2006. [via WSJ]
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